The annual Tony Elumelu Foundation Entrepreneurship Forum is one of the most vibrant aspects of the TEF Entrepreneurship Programme. This year’s TEF Entrepreneurship Forum, the fourth edition of the annual Forum, is taking place on October 25 at the Federal Palace Hotel, Lagos, Nigeria. The Forum has grown in scale every year with over 5,000 entrepreneurs and the entrepreneurship ecosystem players expected to converge on Lagos for this year’s Forum. This year, we are celebrating the 2018 beneficiaries of our Entrepreneurship Programme, bringing the total beneficiaries of our USD100 million seed capital, mentoring and world-class training to 4,470 African entrepreneurs. The Forum is also an opportunity for the entrepreneurs to engage with and learn from established entrepreneurs, global investors, leaders from the African public and private sectors and developmental organizations.
In keeping with the Foundation’s track record – most recently with President Macron of France – of bringing politicians face-to-face with the new generation of young businesswomen and men shaping Africa, the Forum will include an interactive session with President Uhuru Kenyatta of Kenya and President Nana Akufo-Addo of Ghana, moderated by TEF Founder, Tony O. Elumelu. We will also launch TEFConnect, the world’s largest digital platform for African entrepreneurs, dedicated to connecting African entrepreneurs and the entrepreneurship ecosystem. The programme will also include a fireside chat with TEF Trustee, Gavi Champion for Immunisation in Africa and CEO, Avon Medical, Dr. Awele Elumelu, moderated by CNNMoney Africa Correspondent, Eleni Giokos, on “The Role of the Private Sector in Furthering Economic Development across Africa”.
The TEF Entrepreneurship Programme is four this year. Looking back, what would you say is the impact of the programme so far, especially on past beneficiaries and their businesses?
In just four years, we have directly impacted 4,470 entrepreneurs, and we are beginning to see the results – they are creating jobs, generating revenues and making a social impact through their businesses. This year, we began to track the progress of the 3,010 entrepreneurs who graduated between 2015 and 2017 and our study of just 1,472 entrepreneurs who responded to the survey shows they have generated USD52,486,234 after completion, compared to USD18,155,241 before they were selected for the TEF Entrepreneurship Programme. In terms of jobs, the same 1,472 entrepreneurs have created 11,971 jobs compared to 4,034 before they were selected for the programme. Furthermore, our study shows that upon completing the TEF Entrepreneurship Programme, 62 percent of these businesses are now fully operational while 29 percent have become partly operational. This also explains the phenomenal growth in jobs (15 percent of the entrepreneurs now employ at least 10 people) and revenue (13 percent of the entrepreneurs now generate above $50,000 annually) recorded after the Entrepreneurship Programme.
With regard to gender representation, over the years, the Foundation has made it a priority to ensure that both female and male entrepreneurs have an equal opportunity to apply to the programme. When the programme was launched in 2015, 76 percent of the applicants were male while 24 percent were female. As a result, male applicants accounted for 71 percent of the entrepreneurs eventually selected into the programme while female applicants accounted for only 29 percent. Given this significant gender disparity, the Foundation developed strategies to create awareness about the programme amongst women and encourage them to apply for the programme. To achieve this, the Foundation ensured that advertisements and promotions of the programme were targeted towards women. On social media, profiles of successful female entrepreneurs on the programme were used to encourage aspiring female entrepreneurs to apply. Female alumni of the programme took this a step further by organizing workshops and trainings to assist them in their application. The result of all these activities was that by 2018, the gap had significantly reduced – male applicants accounted for 58.8 percent of total applicants, down from 76 percent in 2015, while female applicants accounted for 41.2 percent, up from 24 percent in 2015. Similarly, in terms of selection, the number of selected male applicants fell to 65 percent, from 71 percent in 2015, while selected female applicants increased to 35 percent, from 29 percent in 2015.
In terms of the impact of the Seven Pillars of the TEF Entrepreneurship Programme, the 1,472 entrepreneurs who responded to the survey, we see that both the 12-week enterprise toolkit and the mentorship received at least a 70 percent high impact rating while 61 percent of them indicated that TEF provided them with the first seed capital for their business. So clearly, the TEF Entrepreneurship Programme is having an impact. We will be launching the TEF Entrepreneurship Programme 2015-2017 Progress Report at the TEF Forum on October 25, which will provide deeper analysis and insights of impact across sectors, regions and business location.
Considering Africa’s specific growth needs and peculiarities, does the TEF Entrepreneurship Programme place priority on certain sectors of the economy?
TEF Entrepreneurship Programme is and will remain sector-agnostic. We have over 30 sectors represented in the programme across the 54 African countries. The agriculture sector has, however, consistently accounted for more of the selected entrepreneurs on the TEF Entrepreneurship Programme since the launch of the programme in 2015, without any deliberate effort by the Foundation to attract entrepreneurs from this sector. This reflects a rising interest of young Africans who seek to operate on different segments of the agriculture value chain using more modern technology and innovations than their predecessors.
The recent rise of start-ups in the ICT sector on the continent continues to illustrate the increasing significance of technology across the continent accounting for over 8 percent of the applications. Besides the development of core IT software and applications, these ICT entrepreneurs are creating solutions that are relevant to a plethora of industries. Given that the world is rapidly moving into the Fourth Industrial Revolution, the relevance of this sector in ensuring that Africa is not left behind cannot be overstated. Manufacturing has also emerged as one of the popular sectors amongst the TEF entrepreneurs accounting for an average of 7 percent of applicants annually.
Four years into the 10-year programme, it is evident that African start-ups and SMEs will find the gaps in the market and develop innovative solutions to meeting these gaps for their products and services.
Beyond the annual forum, is there a follow-up mechanism whereby the beneficiaries draw continuous support from the Tony Elumelu Foundation and the Foundation as well tracks the progress of the beneficiaries?
Paramount to the success of TEF Entrepreneurship Programme is our continuous engagement with the entrepreneurs who have successfully completed the programme because we are building to last. We maintain contact with the entrepreneurs both online and offline. Through the TEF Online Hub, we have built Africa’s largest online network of African entrepreneurs for cross-border business growth, skills, and knowledge-sharing. TEF Hub is the go-to destination for TEF Alumni and our value-add partners, who provide ongoing products, business information, advisory services, innovation capital, market access, skills and training, and supply chain integration for TEF Alumni. This is also the platform through which we promote the emerging entrepreneurship networks across Africa and globally, important for business opportunities, building cross-country networks and fostering a culture of entrepreneurship.
In 2017, we launched TEF Entrepreneurship Awards to recognise the achievements of TEF entrepreneurs from the 54 African countries to raise their profiles and inspire investors and policymakers to recognise and support African entrepreneurs. We also launched TEF Forum Pitch Competition, and we have added TEF Africa Market Place to the TEF Forum where TEF Entrepreneurs can showcase and sell their products and services to a diverse and inclusive pan-African gathering.
At the 2018 TEF Forum this month, the Foundation will launch TEFConnect, Africa’s largest digital platform, connecting African entrepreneurs globally. Positioned as the “Facebook for African Entrepreneurs”, the platform will provide three main benefits to its users – empower African entrepreneurs to buy and sell across countries and regions in Africa’s largest digital marketplace with digital traffic reaching millions of people; access free business tools such as financial planning calculators and marketing templates, and enable entrepreneurs to promote their businesses to potential investors and other partners. Through TEFConnect, we are scaling our impact by connecting African entrepreneurs all over the world on a single platform and increasing trade opportunities.
Apart from the seed capital, are the beneficiaries of the programme able to leverage on TEF’s connections to access additional capital from banks and other sources across Africa and beyond?
Access to finance remains one of the biggest challenges for African start-ups and SMEs. To enable TEF entrepreneurs to access capital, we have formed a range of diverse partnerships with financial services providers and investors to mobilise both early-stage and growth-stage financing. Contrary to the perception that African start-ups are risky investments, we have ample evidence that they are bankable provided they are given the right business development support as proven by our entrepreneurship development programme. Based on this, we have encouraged commercial banks to embrace SMEs and to set up SME desks as part of their services. We have signed a partnership with Agence Francaise de Development (AFD) to provide risk guarantee scheme with United Bank for Africa (UBA) Plc. In 2018, we will further diversify and deepen the partnerships between financial services providers and investors with the TEF entrepreneurs. Through our engagement with African start-ups, we are aware that financial literacy is the weak link and we have enhanced our financial management modules to support them. We are also aware that the finance sector also needs to be educated to better serve start-ups and are working with angel networks, promoting public private grants and technical assistance, venture capital, private equity, and financial institutions. TEFConnect will build an investor network on the digital platform.
Interest in the TEF Entrepreneurship Programme has continued to grow annually resulting in increased number of applications. Are there plans to expand the scope and number of beneficiaries?
The TEF Entrepreneurship Programme started in 2015 with 20,000 applicants and by 2018 this figure has grown to 151,692 from across 54 African countries. Given the rapid increase in the number of African start-ups applying, in 2017, we began to scale and replicate the TEF Entrepreneurship Programme with strategic partners who can support the selection of additional entrepreneurs to the programme. While TEF provides the training and mentorship for their businesses, International Committee of the Red Cross (ICRC) has sponsored 200 entrepreneurs in the post-conflict areas of Nigeria with a commitment of $1 million seed capital. United Nations Development Programme (UNDP) has provided USD200,000 to support 40 pan-African entrepreneurs with USD5,000 seed capital funding. Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), a German development agency, has committed €1 million to empower 210 additional young and female tech entrepreneurs in selected East and West African countries. Agence Française de Développement (AFD) is providing a risk-sharing guarantee framework for loans for Tony Elumelu Entrepreneurs to access loans from UBA. They have also committed finance for joint research to track the impact of the TEF Entrepreneurship Programme. We are also pleased to share that Indorama Corporation has pledged USD100,000 to support 20 Nigerian entrepreneurs with USD5,000 seed capital funding in 2017 and 2018. Other partnerships include Microsoft, Sage One and GE, for ongoing business development support services and access to markets for the TEF Entrepreneurship ProgrammeAlumni. They will serve as blueprint for others to follow as we actively engage the participation and contribution of the partners to support sponsorship of additional entrepreneurs, and value-add partners.
What would you consider the major challenges in the past four years since inception of the TEF Entrepreneurship Programme?
The biggest challenge has been managing success. We never imagined the TEF Entrepreneurship Programme would grow so rapidly. In 2015, we received over 20,000 applications from 50 African countries; in 2016 it was over 45,000 from all 54 African countries; 2017 saw this number increase to 93,000 and in 2018 we had 151,692 applications from 54 African countries. Every year we select 1,000 unique entrepreneurs onto the programme. The challenge is managing the expectations, dreams and hopes of those who are not selected. They remain part of the TEF Network and we share information and value-add opportunities, but we realized this is not enough. So, in 2018 we decided to build an open source digital platform, TEFConnect, where those not selected and others can access business tools, investor network, marketplace, mentoring, and learning content. TEFConnect will be a place for knowledge exchange, solve common problems, learn useful tips, form virtual networks across the continent to drive business growth.
Given that governments are major drivers of policy reforms, what kind of relationship do you have with governments across Africa?
The importance of government in establishing and maintaining healthy and competitive enabling business environment cannot be overstated. The economic ecosystem is determined by the policies and functionality of government. Their effectiveness is critical to the success of SMEs. The Foundation continues to engage with government policymakers and leaders. At the 4thedition of the TEF Forum, we will welcome the President Nana Akufo-Addo of Ghana and President Uhuru Kenyatta of Kenya to engage in an interactive dialogue with the TEF founder, Tony O. Elumelu (CON). In July this year we welcomed President Macron of France to engage with over 2,000 TEF Entrepreneurs shaping Africa. In 2016, we welcomed President of Sierra Leone to the TEF Forum. Nigeria’s Vice President Yemi Osinbajo joined the Forum in 2015 and 2017, to name but a few.
Over the past four years the Tony Elumelu Foundation has played its part in helping African governments see that innovation, entrepreneurship and economic growth are inextricably linked. For example, Rwanda has streamlined its business registration procedures to such an extent that it only takes six hours for an entrepreneur to register and be ready for operation. Kenya’s economy has been transformed through entrepreneurship. The Ghanaian government’s Youth Enterprise Support initiative provides young entrepreneurs and innovators with opportunities to grow their businesses from idea to implementation to scale. Enterprise Uganda is a programme of the Ugandan government which offers young entrepreneurs training and financial literacy aid as well as a credit facilitation service that provides guidance around available sources of financing. These few examples are proof that attempts are being made to create entrepreneurial ecosystems that encourage and promote business development. While establishing a quality business environment is important, from our engagement with thousands of African entrepreneurs, the governments also need to address the broader issues: affordable power, reliable infrastructure, taxation, cross-border business, access to credit, etc. The Foundation participates and supports high-profile pan-African and international business conferences, summits, and forums to highlight the economic value of entrepreneurship to policymakers, promote entrepreneurship as good career choice and support the development of an entrepreneurial culture across the continent.
Overall, what role would you say the TEF is playing in driving innovation and creativity across Africa?
The Tony Elumelu Foundation is driving innovation and creativity through its investment in the pan-African start-ups and SMEs. The selected entrepreneurs receive business development training through our 12-week Start-up Enterprise Toolkit, supported by mentors selected from around the world, business plan reviews by Accenture, followed by the seamless disbursement of direct seed capital to the qualifying TEF entrepreneurs across 54 African countries. This is innovation. Over the four years, we have increased the number of women business owners from just 24 percent in 2015 to 41 percent in 2018. We have invested in entrepreneurs in agriculture, ICT, fashion, manufacturing, education, and training, media and entertainment who are all developing sophisticated marketing and revenue models and driving innovation and creativity through their products and services. Many have successfully leveraged their association with the Foundation to win awards, access new funding, business support services, training, cross-border trade across Africa and the world generating revenues and creating jobs. The Foundation has built an investible pipeline of 4,460 entrepreneurs who are a viable investment opportunity for African and global business across the high growth sectors. Technology innovation and exchange are important drivers and we have built proprietary robust, scalable, and cloud-based multilingual technology platforms for applications, mentor learning, documents management, and alumni engagement. These platforms are the Foundation’s greatest assets, facilitating knowledge exchange, product promotion, networking and enabling the Foundation to connect African entrepreneurs across the continent. We have a database of over 300,000 African entrepreneurs from 54 African countries which is set to grow and will form the foundation for TEF Research Publications.